THE Zambian Government has crafted a business survival plan for Konkola Copper Mine (KCM), to save the mining firm from collapse, Mines Minister Christopher Yaluma has disclosed.
Mr Yaluma says the move has been taken following the findings of an
audit carried out at the Vedanta Resources owned firm by the Zambia
Revenue Authority (ZRA).
ZRA had carried out an inquiry into KCM’s operations following revelations by the company’s chairperson Anwar Agarwal, that he had bought the mine for a song and was reaping hefty profits from the firm.
Mr Yaluma, however, said the audit had shown that KCM was not making any profits as alleged by its chairperson and was instead on the verge of collapsing.
‘‘To save jobs at the mine, Government as the minority shareholder in the firm, has taken steps to save the company from collapse,’’ he said in an interview. Mr Yaluma disclosed that the financial predicament at the company was not due to operational challenges but had been caused by mismanagement.
He said as at September 30, 2013, KCM’s total liabilities amounting to US$1.567 billion exceeded current assets by $123 million, consequently the mine had failed to meet its obligations.
Since commencing operations in Zambia a decade ago, KCM has invested in excess of $2.8 billion in its operations that have resulted in a production rate of not less than 100, 000 tonnes of copper per annum.
London Stock Exchange- listed Vedanta Resources’ chief executive officer, Tom Albanese recently said the conglomerate was confident about KCM remaining a cornerstone in Zambia’s vision of producing more than 1.5 million tonnes of copper annually.
JAMES KUNDA – Times of Zambia